Founder, BWS Financial Inc

Hamed Khorsand

Founder

Independent Stock Specific Research

BWS Financial Inc

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Equity Bottom-Up

<ul>
<li>ATEN reported better than expected fourth quarter results, but it was the lack of quantitative revenue guidance that garnering all the attention</li>
<li>We had highlighted increased macro risks in our January update leading to 2023 becoming dependent on the second half of the year.</li>
<li>The first quarter is seasonally the slowest period of the year for ATEN, which could be the reason for management taking a conservative approach with 2023 guidance.</li>
</ul>


ATEN reported better than expected fourth quarter results, but it was the lack of quantitative revenue guidance that garnering all the attention
We had highlighted increased macro risks in our January update leading to 2023 becoming dependent on the second half of the year.
The first quarter is seasonally the slowest period of the year for ATEN, which could be the reason for management taking a conservative approach with 2023 guidance.


<ul>
<li>The recent wave of layoff related headlines along with companies putting greater scrutiny on cash outflows could result in ATEN experiencing slower than expected revenue growth in 2023</li>
<li>When there are layoffs and changes to employees working more from the office it is likely to reduce the number of security devices purchased</li>
<li>Our lowered revenue outlook comes with the expectation ATEN would be able to ramp revenue in the second half of the year </li>
</ul>


The recent wave of layoff related headlines along with companies putting greater scrutiny on cash outflows could result in ATEN experiencing slower than expected revenue growth in 2023
When there are layoffs and changes to employees working more from the office it is likely to reduce the number of security devices purchased
Our lowered revenue outlook comes with the expectation ATEN would be able to ramp revenue in the second half of the year 


<ul>
<li>ATEN continues to demonstrate its growth ability by focusing on its security first approach. ATEN reported third quarter revenue slightly more than we were projecting</li>
<li>The steady growth ATEN has experienced this year has come through the diversification of its customer base</li>
<li>ATEN’s management asserted demand has been consistent and dependent on performance. ATEN has added more customers throughout the year, which should serve as a baseline for incremental revenue in 2023</li>
</ul>


ATEN continues to demonstrate its growth ability by focusing on its security first approach. ATEN reported third quarter revenue slightly more than we were projecting
The steady growth ATEN has experienced this year has come through the diversification of its customer base
ATEN’s management asserted demand has been consistent and dependent on performance. ATEN has added more customers throughout the year, which should serve as a baseline for incremental revenue in 2023


<ul>
<li>ATEN should continue to benefit from security remaining at the top of priority lists for enterprises and service providers after more network intrusion and hacking news in recent days</li>
<li>The proposal from Vista Equity Partners to purchase KnowBe4 (KNBE) provides greater clarity of the discount ATEN’s stock trades at</li>
<li>ATEN’s purchase of shares from its venture capital shareholder, Summit Partners, at $12.75 per share suggests there is value at current levels</li>
</ul>


ATEN should continue to benefit from security remaining at the top of priority lists for enterprises and service providers after more network intrusion and hacking news in recent days
The proposal from Vista Equity Partners to purchase KnowBe4 (KNBE) provides greater clarity of the discount ATEN’s stock trades at
ATEN’s purchase of shares from its venture capital shareholder, Summit Partners, at $12.75 per share suggests there is value at current levels


<ul>
<li>ATEN reported an increase in revenue in the second quarter of 2022 even though the Company faced currency headwinds in Japan. Underlying demand for security is the reason for outperformance</li>
<li>ATEN’s ability to grow revenue and earnings is resulting in an increase in the cash balance, which management has been using to repurchase shares and pay a cash dividend. </li>
<li>Revenue and earnings growth in the second half of the year should support ATEN’s stock reaching our price target in the near term.</li>
</ul>


ATEN reported an increase in revenue in the second quarter of 2022 even though the Company faced currency headwinds in Japan. Underlying demand for security is the reason for outperformance
ATEN’s ability to grow revenue and earnings is resulting in an increase in the cash balance, which management has been using to repurchase shares and pay a cash dividend. 
Revenue and earnings growth in the second half of the year should support ATEN’s stock reaching our price target in the near term.


United States

A10 Networks Inc. provides computer networking products and security solutions. The Company offers application networking platforms and security products to streamline technology operations, including cloud and service providers and application delivery solutions. A10 serves customers in various industries worldwide.

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A10 Networks (ATEN US)

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